ikegps GROUP LIMITED l MEASURING UP FY16 RESULTS & COMMENTARY MEASURING UP FY16 Results & Commentary

Transcription

1 MEASURING UP FY16 Results & Commentary 1

2 IMPORTANT NOTICE This presentation is given on behalf of ike GPS Group Limited (Company Number NZ , NZX:IKE) Information in this Presentation: is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in ikegps Limited; should be read in conjunction with, and is subject to, ike s FY16 financial statements, market releases, and information published on ike s website ( includes forward-looking statements about ike and the environment in which ike operates, which are subject to uncertainties and contingencies outside of ike s control ike s actual results or performance may differ materially from these statements; includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; and may contain information from third parties believed to be reliable however, no representations or warranties are made as to the accuracy or completeness of such information. All information in this presentation is current at the date of this presentation, unless otherwise stated. All currency amounts are in NZ dollars unless stated otherwise. Receipt of this Document and/or attendance at this presentation constitutes acceptance of the terms set out above in this Important Notice. 2

3 INVESTOR CALENDAR Audited Financial Statements 23 May* Annual Report 30 June* Annual General Meeting 20 Sept* *Dates New Zealand time 3

4 FY16 IN REVIEW 2.3x Growth Revenue & other income up 2.3 times against FY15, to $9.2m. 56 Capability Personnel in CO, WA and NZ offices. Team depth to support growth plans and transition to cash breakeven. >2,000 New enterprise customers First $1m IKE 4 account in the utility market. Rapid Spike expansion across signage vertical. Stanley Smart Measure Pro selling through at Lowe s at approximately 1,000 units per week. 4 New product platforms A portfolio of products now in place to address multiple vertical markets. Spike: Next generation smart phone solution, including cloud services. Stanley Smart Measure Pro: Launched successfully in Lowe s across North America, entering Europe in FY17. IKE 4: New platform for measuring, analysing and managing distribution assets. ike Cloud: Underpinning all products transition to subscription revenues in FY17. 4

5 WINNING IN THE MARKET Competitive landscape ike approach at beginning of FY16 Achieved in FY16 Aggressive price discounting on hardware, focused horizontally Hybrid software & hardware offerings allow premium pricing & recurring revenue. Focused expertise for defined niche markets New products and industry-specific software enhancements: - IKE 4 solution, almost doubles value, margin and price against IKE 3 - Next generation Spike, almost doubles value & margin Walled garden Developing an open and integrated ecosystem, while maintaining value for ike IKE Cloud and Spike App-to-App API released: - Enabling integration into incumbent mobile apps and work flows Treat customer service as a cost Superior customer experience to drive adoption - Field training and integration teams creating competitive advantage, and delivering revenue - Very low product returns Brand zero Building a brand, and measuring experience, that customers love: clear, simple, personable, expert Passionate customers are driving IKE s brand. In FY16 Spike was recognised globally as the most innovative product to enter the signage market. Legacy reseller model is expensive and limiting Layered approach: - Online sales model scales fast - Direct sales with high customer touch & high service, underpins high value IKE 4 sales - Partners provide scaled market access - Ecommerce engine for Spike is delivering material revenues. - Direct sales, marketing and field integration teams in place for IKE 4. - Stanley Smart Measure Pro introduced via Lowes. - Spike signage partner network growing rapidly in U.S. and non- U.S. markets 5

6 IKE 4 SOLUTION INTRODUCED: ADDRESSING MORE OF THE POLE VALUE CHAIN Designed from the ground up to set the standard for measuring, locating and analysing utility poles for aerial fiber deployments, joint-use applications and construction of aerial outside plant. 6

7 SPIKE IS WINNING IN THE SIGNAGE MARKET 2, ,000 2,000 signage businesses relying on Spike every day to improve their business processes and save time & money while we ve won 2,000 customers in the initial 12 months addressing this market, there are another 148,000 to serve 7

8 AND SPIKE JUST WON THE INT L SIGN ASSOCIATION S GLOBAL PRODUCT OF THE YEAR AWARD The most important product to enter the signage market in the past decade 1 st Place Winner 8

9 STANLEY SMART MEASURE PRO S SUCCESS IN THE U.S. BRINGS EUROPE MARKET ENTRY FY17 New markets being launched in FY 17 UK France Germany Successful Lowes Launch in U.S. FY16 I rarely take the time to post a review of a product, but every once in a while you find something like this that blows everything else out of the water. I'm in real estate and rely on exterior measurements to calculate 9

10 Results

11 RESULT AFTER TAX YEAR ENDED FY14 Audited FY14A $'000's YEAR ENDED FY15 Audited FY15A $'000's YEAR ENDED FY16 Audited FY16A $'000's Revenue and other income 1,884 4,026 9,214 Expenditure (3,600) (9,215) (17,392) Loss before depreciation, amortisation, financing and tax (1,716) (5,189) (8,178) Depreciation and amortisation (363) (807) (1,306) Foreign exchange (losses) / gains (158) Other expenses from IPO (272) - Loss before financing and tax (2,237) (5,643) (9,204) Net finance income / (expenses) (49) Income tax (expense) / benefit 24 (3) 7 Loss attributable to owners of ikegps Group (2,262) (5,081) (8,836) 11

12 >100% YEAR-ON-YEAR GROWTH CONTINUED. NEW VERTICAL MARKETS DEVELOPED NZ$9.2m NZ$4.03m NZ$1.9m FY14A FY15A FY16A 12

13 GROUP OPERATING RESULTS & NET ASSETS FY2014 $'000 s FY2015 $'000 s FY2016 $'000 s Total operating revenue and government grants 1,883 4,026 9,214 Net loss before other comprehensive income (2,262) (5,081) (8,836) Net assets 3,949 22,122 13,241 13

14 CAPABILITY: INVESTMENT IN PEOPLE FULL TIME EMPLOYEES NEW ZEALAND BASED US BASED FULL TIME EMPLOYEES ENGINEERING OPERATIONS SOFTWARE ENGINEERING CORPORATE SALES MARKETING 14

15 Outlook

16 KPI s Metric Expectation at commencement of FY2017 Projected Performance Customer and market growth We expect: - 50% growth in IKE 4 customer acquisition against FY16-50% growth in Spike customer acquisition in the Signage market against FY16-60% of Spike users in the Signage vertical to subscribe to the cloud service. - Expansion of Stanley Smart Measure Pro into Europe to deliver volumes of 500 units per week. >50% customer growth over FY16 Cash and investor relations We - expect to transition to cash breakeven in Q4 FY17. - plan to continue to implement a long term investor relations programme in the U.S. market to complement NZ activities, and potentially seek a U.S. listing. Cash breakeven Q4 FY17 Gross margins, pricing & business models We expect - gross margins to increase on all ike-branded products - all products to develop a higher bias to recurring revenue via cloud-based software subscriptions - the introduction of subscription business models for the IKE 4 and Spike products to materially increase value and thus customer total cost of ownership over a 3 year period. We also expect this business model change to impact recognized revenue in FY17 relative to customer growth metrics. >65% Gross Margin on ike-branded products (IKE 4 and Spike) Recurring revenue streams established across all products Sales & Marketing Costs will increase in absolute dollar terms as investment toward acquiring customers and growing market share continues, however we expect to see a relative reduction in sales and marketing costs as a percentage of operating revenue. 30% of revenue investment into sales & marketing 16

17 WELL POSITIONED FY17 markets & revenue component Electric Utility and Communications market, via IKE 4 Today Established sales, marketing, integration and delivery teams in place. Quality and depth of sales pipeline increasing. Several factors in the U.S. provide a market tailwind, driving more & more infrastructure owners and third parties to have the need to measure and model distribution structures: such as communications fibre roll-out and regulation. Signage and new markets, via Spike Distribution channels, product & brand recognition developing quickly in the Signage market in the U.S., and emerging in Europe. Opportunity for larger enterprise sales in FY17. New vertical market opportunities provide upside potential, such as insurance and real estate verticals. Construction and Contractor market, via Stanley Smart Measure Pro Sales in North America via Lowe s at around 1,000 units per week. Orders received for launch into new European markets: UK, Germany and France, for delivery through 1H FY17. Still early in selling-through the high margin, add-on cloud subscription services Contract revenue In-Q-Tel backed development contract for U.S. intelligence customers will be complete Q1 FY17. Favourable initial response to the product from various government end-users. Next step is to target Spike for wider product acquisition programmes later in FY17, FY18 & FY19. 17

18 IKE 4 SALES MOMEMTUM Sales of the electric utility solution up almost 50% against PCP Major customer wins including first $1m+ account Total addressable market estimated at $700m Delivering more value - Scalable cloud offering introduced in FY16 to drive subscription revenues in FY17 and beyond - Additional product features introduced, expected to almost double the value and total cost of ownership for a customer over three years Launch of Electric Utility Solution 112 electric utility solutions shipped in FY14 Sales up almost 2x over pcp Sales up almost 1.5x over pcp Cloud-based IKE 4 platform launched Projecting 1.5x sales growth against FY16 January 2014 March 2014 March 2015 March 2016 March 2017 FY14YE FY15YE FY16YE FY17 FORECAST 18

19 MOBILE SOLUTION SALES MOMENTUM Stanley Smart Measure Pro Spike being rapidly adopted across the signage market Total addressable market estimated at $ m Initial sales beginning into other verticals such as real estate, insurance and government markets Cloud and subscription products introduced FY16, plans to monetize in FY17 Formal Launch E-commerce store launch >1,000 new customers with zero-touch Strong engagement with signage, insurance, real estate & intelligence industries (sales and partners secured in each of these markets) More than 7x year-on-year revenue growth OEM: Outperformance of Stanley Smart Measure Pro sales v forecast Spike: >2,000 signage customers OEM: Projecting sales of 500 units per week and European market entry Projecting 3,000 new Spike signage customers, and 60% uptake of the Spike Cloud service March 2014 March 2015 March 2016 March 17F FY15YE FY16YE FY17 Forecast 19

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